Appearing somewhat nervous, Ben Bernanke held the first ever press conference by a Federal Reserve chairman.
In his opening remarks, Bernanke correctly admitted that inflation on a long-term basis is strictly a monetary phenomenon. We should be able to hang him with this quote, down the road, when price inflation is much higher. How is he going to blame other factors at that point?
Remarkably, drawing viewership lower than attendance at Atlas Shrugged, Part 1, the counter of viewers accompanying the Fed video stream indicated that viewership declined as Bernanke droned on. The counter peaked at approximately 16,000 and was down by thousands as the press conference went on.
With plenty of wiggle room, Bernanke indicated that there is unlikely to be a QE3. However, as I have noted, the aggressive-passive Bernanke has plenty of new tools to do whatever the hell he chooses, regardless of what he says, or implies. Most significantly, if he stopped adding reserves to the system today, he has that overhang of excess reserves (over a trillion dollars) that he can coax into the system. Watch the reserve numbers and the money supply, as President Obama has said in another context, the press conference is about nothing more than a carnival barker in action, a boring barker at that.
Other small notes, Bernanke did indicate that when the Fed uses the term "extended period" that it is a somewhat nebulous term, but that it generally refers to a couple of FOMC meetings out.
He also said that inflation expectations are not high, which means he is either lying or hasn't looked at the price of gold and silver lately.